The U.S. Commerce Department released figures Wednesday on 2004's trade deficit. At $666 billion, it is the largest trade imbalance in the history of the United States and 25 percent higher than last year's number. Not only is the $666 billion amount the largest in history, but as a percentage of the gross domestic product--5.7 percent--the figure is a record high as well. Though nations can still increase wealth while maintaining trade deficits, the means by which to do this--exports--have remained stagnant in the new century. Trade deficits are less an indicator of economic health than the direction of geopolitical power. The current imbalance nevertheless represents bad news for Americans on both fronts.

While not disagreeing with any of your points, I don't think this table adequately represents US exports. It should be noted that 25-30% of the exports from Japan, China or Europe (and even Mexico) are in fact US goods and technology manufactured overseas, and that that money is repatriated to the States. And exports from those regions have hardly remained stagnant.

This is indeed something the US should worry about, however I think that for much of it, the real culprit is the EU's gobbling of Iranian oil, which is causing the OPEC dinosaur to rapidly lose market control. The US must hurry in opening up the Iraqi market to combat Iranian oil domination.

Dan, also factor in the "planned decline of the dollar," whatever the hell that is. How that can be good, I have no idea.

This reminds me of the old concept of mercantilism.

Homer, I have to disagree with you just a bit. While the profits from those goods may come back to the U.S., what about the payroll? We may be creating wealth for stockholders in said companies, but that will only trickle down so far.

Here in Kentucky we lost thousands of textile jobs. For now, they have been replaced by retail distribution centers, but only to a point. I find it dangerous that we are losing our industrial base.

Also, Dan, or someone with better reference guides than myself, did we also for the FIRST time become a net importer of food? What the heck is up with that? I thought we were the breadbasket of the world?

20 years ago there was a rallying cry to cut off food shipments to OPEC if they didn't cut oil prices. Now that we import more food than we export, what will we threaten them with? Oh, yes, I can hear the cry now....."Send us cheap oil or we won't send you the Amazon.com book you ordered."

An economy built totally on service is a dangerous bubble.

Be well,

Sponge

The idea behind planned declines of the dollar is a kind of "take a loss now for a greater gain in the future." mentality. Im not supporting it here, just explaining what it is.

Secondly, the American manufacturing sectore simply CAN NOT outcompete the overseas one in our current state. We cant force corporations to hire American workers, which clearly are the inferior choice. And so foreign work is hired instead.

Ben - the American worker is only the lesser choice because they've been steadily pricing themselves out of the market. Theoretically, the global market will correct itself as foreign workers increase their standard of living via better wages. Practically, it's the main reason why many of the governments of these workers have no interest in ever allowing it to happen. I don't think we'll live to see the ChiComs allowing unions or Bangladeshi workers with a $7-an-hour minimum wage (though I hope I'm wrong).

I know all that of course, and I also hope you are wrong. However by the time the global market "corrects itself" the manufacturing sector will have already moved out of America. The more advanced nations of the world will fill out a service-sector economy, while the poorer, less developed nations occupy a manufacturing based economy.

Sponge, I'm not sure what you're disagreeing with. I didn't make any comments on the loss of jobs in the US due to outsourcing. I just commented that the true benefit to the US of US exports is not easy to determine from the table Dan linked to.

Ben - I suspect that if the trend ever does get turned, and manufacturing once more becomes cheaper domestically, then the work (and the jobs!) will return.

Beside the economic benefit, it will also hopefully cure the snobbery the white-collar worker has begun to show to the blue-collar worker (think of the term 'unskilled labor'), and help us recognize the dignity of manual labor.

The term "unskilled laborer" is, I believe, older than the hills. However I agree with you in principle, the attitude of the white collar worker has become one of aloof snobishness, ignoring the important, and the noble, contribution blue collars make to American society.

I agree with Ben-T. The pompas and elitist attitudes of various white collar folk, is pathetic. By and large, they are living untruthfull and immoral lives chasing, as the Native Americans put it, "false gods of the flesh", i.e. money etc... The most important things in life have proven to be not "things" at all. It is spoken that it is greed that seperated man from the Earth, and it is greed that will destroy man also.